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White Collar Crime on Rise at Automotive Companies

Among the top types of economic crime in the automotive sector, 74% are committed by internal perpetrators, making it the industry with the highest rate of insider crime.

Twenty eight percent of automotive companies surveyed by PwC report experiencing economic crime. This is up slightly from 25% in 2011.

Among the top types of economic crime in the automotive sector, 74% are committed by internal perpetrators, making it the industry with the highest rate of insider crime.

Most internal perpetrators were either senior executives (23%) or middle managers (54%).

Top types of economic crime in the automotive sector include:

  • Asset misappropriation (74%)
  • Procurement fraud (34%)
  • Bribery and corruption (34%)
  • Human resources fraud (13%)
  • Cybercrime (13%)

"Economic crime results in significant revenue lost as well as impacting employee morale," said Ted Hawkins, partner, PwC US Forensic Services.

"As the automotive industry continues to do business on a global basis, it becomes even more important to implement a fraud risk management strategy to fight against these types of crimes,” Hawkins added. "When automotive companies invest in emerging markets, these types of crime-fighting tools can help to uncover so called kick-back schemes and unethical vendor selection."

Survey results indicate that only about half (48%) of the automotive sector's companies have conducted a fraud risk assessment at least annually over the past 24 months—and 27%  haven't completed one at all.    

For more information about PwC's Global Economic Crime study, visit www.pwc.com/auto 

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